Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324319 
Year of Publication: 
2025
Series/Report no.: 
RF Berlin - CReAM Discussion Paper Series No. 37/25
Publisher: 
Rockwool Foundation Berlin (RF Berlin) and Centre for Research & Analysis of Migration (CReAM), Berlin and London
Abstract: 
This chapter analyzes the distinct adjustment paths of U.S. labor markets (places) and U.S. workers (people) to increased Chinese import competition during the 2000s. Us- ing comprehensive register data for 2000-2019, we document that employment levels more than fully rebound in trade-exposed places after 2010, while employment-to- population ratios remain depressed and manufacturing employment further atrophies. The adjustment of places to trade shocks is generational: affected areas recover pri- marily by adding workers to non-manufacturing who were below working age when the shock occurred. Entrants are disproportionately native-born Hispanics, foreign- born immigrants, women, and the college-educated, who find employment in relatively low-wage service industries in healthcare, education, retail, and hospitality. Using the panel structure of the employer-employee data, we decompose changes in the em- ployment composition of places into trade-induced shifts in the gross flows of people across sectors, locations, and non-employment status. Contrary to standard models, trade shocks reduce geographic mobility, with both in- and out-migration remaining depressed through 2019. The employment recovery stems almost entirely from young adults and foreign-born immigrants taking their first U.S. jobs in affected areas, with minimal contributions from cross-sector transitions of former manufacturing workers. Although worker inflows into non-manufacturing more than fully offset manufacturing employment losses in trade-exposed locations after 2010, incumbent workers neither fully recover earnings losses nor predominantly exit the labor market, but rather age in place as communities undergo rapid demographic and industrial transitions.
Subjects: 
China trade shock
Local labor markets
Sectoral reallocation
Manufacturing decline
Worker mobility
JEL: 
F16
J23
J31
J62
L6
R12
Document Type: 
Working Paper

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